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Groupon and Living Social hot topic or great marketing strategy?

Category: General Published on May 05

Recently more and more people have started asking us if using marketing  services such as Groupon or Living Social is a good idea, or if it is  something they will lose money on. The answer to that question is  simple, but will require some explanation. If done right, these  marketing tools can be just as good as any other tool you have access  to.


Recently more and more people have started asking us if using marketing services such as Groupon or Living Social is a good idea, or if it is something they will lose money on. The answer to that question is simple, but will require some explanation. If done right, these marketing tools can be just as good as any other tool you have access to.


First let me give you a quick overview of how these work in case you have never heard of them. The deal is, you put together a special that basically gives the consumer half off your service or product. These marketing services will then charge the user for the “coupon” they get and share half of that amount with you. This means that you get to keep about 25% of whatever amount your original price was. This may sound like a lot, but keep in mind this is designed for low cost items and to get the customer in your door. So how can this be a good deal for you to have to sell something at 25% of your normal retail price?

This is where your marketing mind comes into play. The key to making this work (without losing money on it) is putting together something you can advertise on these services, that you can then sell without losing money on it! Remember that not every coupon may be redeemed, but you will still get paid for every coupon sold. But in this case we are going to assume all coupons are redeemed.

If you can put together a package which allows you to increase the retail value of the package, you can still promote that package through these services. This means if you are smart, you drive up the retail value of the package by putting in what we call fillers. This will increase the overall value, lower your cost and make sure you at least break even on every package sold. Done right, these services can be a great way to get new customers in the door, in hopes that some of them will become regular clients.

For more information about marketing strategy you can feel free to contact us and we will explain to you further how this works, and how you can tie this into your overall marketing campaign. These services as a standalone tool are not worth any more than most other marketing tools you have access to, as part of your campaign and overall strategy they can be phenomenal.